What Happened:
Shares of pool products retailer Leslie’s (NASDAQ:LESL) jumped 22.2% in the morning session after recent SEC filings revealed that interim CEO John Strain and CFO Scott Bowman bought a combined 220,000 shares of the company at around $2.53-$2.58 per share. The insider purchase of LESL stock can be considered a bullish signal, as it demonstrates increased confidence in the company's future. It could also indicate that the managers (CEO and CFO) think shares are undervalued at the current price.
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What is the market telling us:
Leslie's’s shares are somewhat volatile and over the last year have had 77 moves greater than 5%. But moves this big are very rare even for Leslie's and that is indicating to us that this news had a significant impact on the market’s perception of the business.
The previous big move we wrote about was 3 days ago, when the stock dropped 5.7% on the news that the company announced that Mike Egeck is resigning from his role as CEO and board member. Jason McDonell will replace him as the next Chief Executive Officer.
Mr McDonell has nearly 30 years of experience in retail and consumer products. Recently, he served as Executive Vice President, Merchandising, Marketing, and e-Commerce at Advance Auto Parts. Before that, he spent 21 years at Pepsico, where he held several leadership positions. In the meantime, Chairman John Strain will serve as interim CEO until McDonell resumes his role on September 9, 2024. The stock's reaction suggests the market is likely struggling to digest the implications of the sudden change in leadership.
Leslie's is down 56.7% since the beginning of the year, and at $3.02 per share it is trading 63.1% below its 52-week high of $8.18 from February 2024. Investors who bought $1,000 worth of Leslie's’s shares at the IPO in October 2020 would now be looking at an investment worth $138.94.
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